Indian Healthcare Sector: A Hot Spot For Private Equity Firms
The Indian healthcare industry has emerged as one of the fastest-growing sectors in India, contributing 6–7% to the country’s Gross Domestic Product (GDP). However, the government has kept a tight rein on healthcare expenditure, despite rapid economic growth. India’s public expenditure on healthcare stood at 1.2% as a percentage of the GDP, which is way lower than that of other countries.
Healthcare in India is struggling to fulfill domestic demands due to a lack of adequate infrastructure and healthcare professionals. The country is suffering from an acute shortage of medical professionals, especially doctors and nurses.
There is one doctor for every 1,445 Indians as per the country’s current population estimate of 135 crore, which is lower than the WHO’s prescribed norm of one doctor for 1,000 people.
We need more hospitals to provide basic health facilities to people in villages and remote areas. Moreover, only a handful of the population is covered under health insurance and out-of-pocket expenditure has reached ~70% of health spends.
The hospital industry in India is estimated to reach Rs. 8.6 trillion (US$ 132.84 billion) by FY22 from Rs. 4 trillion (US$ 61.79 billion) in FY17 at a CAGR of 16–17%. In Budget 2021, India’s public expenditure on healthcare stood at 1.2% as a percentage of the GDP. The healthcare industry in India has gained significant interest from private equity firms in India owing to its huge growth potential.
The gap in demand and supply of quality health care services, rising capital needs for operational costs, and technology acquisitions have further created new opportunities for investments. India is also witnessing a shift in investment patterns driven by multiple stakeholders — government, private and social investors.
The Indian healthcare sector is very diversified and full of opportunities in every segment, which includes providers, payers, and medical technology. With increasing competition, businesses are looking to explore ways which will have a positive impact on their business. Further, the Government of India is planning to increase public health spending to 2.5% of the country’s GDP by 2025.
India is a land full of opportunities for players in the medical devices industry. The country has also become one of the leading destinations for high-end diagnostic services with tremendous capital investment for advanced diagnostic facilities. Participation of private equity firms in the healthcare sector has grown manifolds as a preferred approach to strengthening healthcare performance.
Quadria Capital, one of the top private equity firms in India, is an independent healthcare focused private equity firm. Quadria focuses on partnering with promising regional healthcare companies and, with its active investment strategy, helps them grow into regional leaders while creating and delivering outstanding returns to its investors.